Appeal, No. 26, May T., 1963, from judgment of Court of Common Pleas of Dauphin County, No. 252 Commonwealth Docket, 1960, in case of Commonwealth of Pennsylvania v. Haveg Industries, Inc. Judgment affirmed.
Vincent X. Yakowicz, Deputy Attorney General, with him Walter E. Alessandroni, Attorney General, for Commonwealth, appellant.
William H. Wood, with him Albert J. Tomalis, and Hull, Leiby and Metzger, for appellee.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Roberts, JJ.
OPINION BY MR. JUSTICE COHEN
In March, 1955, Haveg Industries, Inc. (then known as Continental-Diamond Fibre Company), entered into an agreement with the Budd Company, Inc., whereby the latter would purchase a substantial part of Haveg's assets. Among the assets to be purchased was a manufacturing plant located in Bridgeport, Pennsylvania. On July 1, 1955, Haveg delivered to Budd an executed deed to said real estate; and on July 2, 1955, the deed was presented for recording to the Recorder of Deeds of Montgomery County, Pennsylvania. In accordance with the consideration of $267,682 recited in the deed, Pennsylvania realty transfer tax stamps in the amount of $2,677 were purchased and affixed to the deed.
On April 24, 1959, the Realty Transfer Tax Division of the Pennsylvania Department of Revenue made and mailed a Determination of Realty Transfer Tax with respect to the sale of the plant in the amount of $11,076.50. It claimed a balance due, after giving credit for the amount paid, of $8,399.50 plus interest. The determined tax of $11,076.50 was based on the Department's appraisal of the actual market value of the plant at $1,107,650.49, an appraisal which included the value of the land, buildings, machinery and equipment all used as an assembled plant. The recited value of $267,682 included only an appraisal of the land and buildings. The parties have stipulated, however, that if appellee-taxpayer's position is sustained, the value of the land and buildings will be established at $400,000 and that an additional realty transfer tax of $1323 plus interest will be due.
Following refusal of its petitions for redetermination and review, Haveg filed an appeal with the Court of Common Pleas of Dauphin County. In its appeal it objected to the Determination for the following reasons: (1) the inclusion of the value of the machinery and equipment in the measure of the tax was erroneous because the Act of December 27, 1951, P.L. 1742, as amended, 72 P.S. § 3283 et seq. (Supp. 1962) did not tax the transfer of machinery and equipment; (2) the imposition of interest was improper because no statute authorized it; (3) in other similar instances the value of machinery and equipment transferred was not included in the measure of the tax; (4) no authority existed for the making of a "Determination" by the Department of Revenue.
Upon submission of stipulated facts, the court below, sitting without a jury, decided that the Department of Revenue erroneously included the value of the machinery and equipment in its measure of tax. It held that unattached machinery and equipment did not constitute
"land, tenements and hereditaments" under The Realty Transfer Tax Act and could not be made such by application of the assembled industrial plant doctrine. It therefore ruled that the correct tax was $4,000 and entered judgment for the Commonwealth in the sum of $1323 ...